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$47.4 million venture capital funded projects
today. $86.4 million yesterday. $51.4 million
the day before.
These amounts are not made up. They are actual
numbers from actual reported venture capital
funding. I get these notices emailed to me day
after day, rain or shine.
These numbers are a constant reminder to me that
companies ñ lots of companies ñ
are getting funded every day.
And these numbers just reflect the reported
venture capital funding. There is probably
double that amount from angel investment and
unreported fundings, and millions more from the
$16 billion pool that SBA has this year.
All in all, it's a lot of money. That's a lot of
companies and banks and groups and individuals
actively investing in small business.
So how come you're still looking for
financing?
Perhaps you aren't presenting your company
effectively.
Or perhaps you haven't located the right
lender.
It's also possible that your concept just isn't
very good, but I doubt that. The fact that you
are reading this article means you are a serious
entrepreneur, with a serious business.
So where do you go to find all these investors?
Here are some starting points:
For standard business financing, talk with the
local office of the Small Business
Administration. It's a different agency, with
different programs and services, and lots of
money to lend. Although much of the focus of the
SBA is on minority business enterprises, the SBA
still has a lot to offer all companies.
Also talk with your local banks. (That was
plural ìbanksî, not singular
ìbankî.) Talking with a number of
local bankers will rapidly bring into focus the
wide ranging priorities of the various banks,
and where your company fit in.
As for venture capital and angel investors,
there are several options.
One option is to go to online sources. There are
a number of online services, such as VFinance,
that sell the names and addresses of possible
investors. It's not expensive, perhaps $2-5 per
name. The idea is that once the entrepreneur
gets the list of 200 or 2,000 names in hand that
he/she will contact each with a written
executive summary or business plan, and then
wait to hear from one of them. This is a very
passive approach, roughly akin to throwing paint
on the wall and hoping that something will
stick. For most entrepreneurs, patience is not a
strong suit, so sitting and waiting for a
response is not quite their cup of tea.
Another option is to go to one of the many
directories of venture capital firms. These
directories typically include addresses, phone
numbers and emails, along with the geographical
areas of interest and the types of investment
that each is seeking. Most businesses can narrow
down their list of prospective investors to
several hundred venture capital firms this way.
And again the entrepreneur is faced with the
prospect of sending out written material for
each one, and waiting for a response.
A third option is to take a more proactive
approach. Savvy entrepreneurs identify the best
prospects themselves from a number of reliable
sources. They get introductions where possible.
They learn everything they can about their
target investors, and then go after it.
Typically a phone call is the first contact, not
an anonymous executive summary.
Knowing that you are calling your best
prospects, you know too that they are open to
hearing from you. You have names, you have
investment histories, you have everything in
hand to make a real connection with the target
investors.
Getting your company financed is one of the
hardest things you will ever do as an
entrepreneur. It can be hugely frustrating,
disappointing and genuinely discouraging. But
lots of entrepreneurs do it. And so can you. Get
the 'No's' out of the way and go for
'Yes!î'The exhilaration of the handshake
sealing the deal is unlike any other transaction
in business. Go for it.
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